PRI Taxes and Bookkeeping

Tax Deadline - Monday, April 18

2011-04-15T15:54:00.000-05:00

The Internal Revenue Service today reminded taxpayers who have not yet filed their 2010 tax returns that individual returns and payments are due next Monday, April 18, 2011.

If you have a balance due, it’s important to pay your tax bill by April 18 to avoid penalties and interest. But even if you cannot pay your entire bill, pay as much as you can to minimize penalties and interest.

For those taxpayers who cannot pay in full by April 18, an installment agreement may be appropriate. Several options are available for setting up a payment agreement with the IRS:

Tips for Managing Your Records

2011-04-12T08:46:00.000-05:00

Tips for Managing Your Tax Records

After you file your taxes, you will have many records that may help document items on your tax return. You will need these documents should the IRS select your return for examination. Here are five tips from the IRS about keeping good records.

Normally, tax records should be kept for three years.
Some documents — such as records relating to a home purchase or sale, stock transactions, IRA and business or rental property — should be kept longer.
In most cases, the IRS does not require you to keep records in any special manner. Generally speaking, however, you should keep any and all documents that may have an impact on your federal tax return.
Records you should keep include bills, credit card and other receipts, invoices, mileage logs, canceled, imaged or substitute checks, proofs of payment, and any other records to support deductions or credits you claim on your return.
For more information on what kinds of records to keep, see IRS Publication 552, Recordkeeping for Individuals, which is available on the IRS website at http://www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Many Tax Return Preparers Must Use IRS e-file Beginning in 2011

2011-02-10T10:26:00.000-06:00

A new law requires many paid tax return preparers to electronically file federal income tax returns prepared and filed for individuals, trusts, and estates starting Jan. 1, 2011.
The e-file requirement will be phased in over two years. As a result of the new rules, preparers will be required to start using IRS e-file beginning:

January 1, 2011— for preparers who anticipate filing 100 or more Forms 1040, 1040A, 1040EZ and 1041 during the year; or
January 1, 2012— for preparers who anticipate filing 11 or more 1040, 1040A, 1040EZ and 1041 during the year.

The rules require members of firms to compute the number of returns in the aggregate that they reasonably expect to file as a firm. If that number is 100 or more in calendar year 2011 (11 or more in 2012 and thereafter), then all members of the firm must e-file the returns they prepare and file. This is true even if a member prepares and files fewer than the threshold on an individual basis.
Clients may independently choose to file on paper.

Frequently Asked Questions

Estate Taxes 2010 and After?

2010-11-21T14:53:00.003-06:00

I offered a couple days ago to post a an article about current outlook for estate taxes. I found this article very informatice. and appreciated the flow chart linked halfway down the page. I copied the article from a website name Business Java

Estate Tax for 2010 – Still No Change

About The Author
Joe Arsenault
Joe Arsenault is a CPA in the state of Arizona. Joe has a tax background and specializes in consulting in the field of retirement and pension taxation for Shurwest Financial Group. Joe is the founder and administrator of Cafetax.

Everyone expected that in 2010 Congress would reinstate the estate tax. Not many people seemed to have the opinion that we would be half way through the year looking at a real possibility of having no estate tax for 2010. Of course as good as an estate tax free year seems, 2011 goes back to the exemption amount of $1 million with a 55% tax rate. Not the friendly $3.5 million of that existed in 2009. There may also be some serious traps for the unprepared, discussed at the end.

I have been getting a lot of questions that are along the lines of..

What will happen if there is no estate tax?
What are the gifting rules in 2010?
What are the basis rules, I heard my clients will not get a step-up in basis?
How will this affect the funding of Bypass trusts since there is no applicable credit?

Unfortunately there really isn’t a simple answer, but if you want one, well… If there is no applicable credit and estate tax, anyone who dies this year will not be subject to estate tax regardless of the size of their gross estate. Of course the ugly truth is, there are many complicated facets to every estate and improper planning will negate any potential benefits of a 0 estate tax year.

Interestingly enough, even without an applicable credit, the $1 million dollar exemption for lifetime gifts that became permanent in 2003 is still in force. One thing did change, the top gift tax rate is only 35% this year. This alone opens up major possibilities for some clients and estates.

As far as the basis rules, I will cover that in another blog. The simple answer is that heirs will receive a total of $1.3 million in basis credit to step up ELIGIBLE appreciated assets. Any estate with over $1.3 million of built in gain will essentially hit the heirs. Otherwise, assets will be valued at the lower of fair market value or basis for beneficiary inheriting the asset.

The last question is the big dog for this blog. What about the Bypass trust? This is where you must focus and be very diligent and flexible with your estate planning and trust work. If a spouse died in 2009 with a sizable estate, it is very common that a provision in their living trust funded the assets into an ‘A’ trust and ‘B’ trust.

The ‘A’ trust is the marital trust that allows the spouse to fully inherit the assets while utilizing the unlimited marital deduction so the first deceased spouse does not have to include the assets in their gross estate. The ‘B’ trust is commonly referred to a Bypass Trust or Credit Shelter Trust. The assets in this trust are included in the first spouse’s estate but not the surviving spouse’s estate. So in 2009, if $3.5 million is funded in the ‘B’ trust, that maximized the gross estate without triggering tax because the applicable credit was $3.5 million, and removes $3.5 from the surviving spouse’s estate.

Below is a pdf of a flow chart I created that illustrates this concept in the most simple form. Assume a community property state where the living trust funds the A/B trust by 50 percent each. Note that this is hypothetical and simplified.

Fact pattern applied to flow chart:

$5 million dollar gross estate (asset type ignored for simplicity)
First spouse passes away
Trust is funded with full $5 million and split 50/50 between A and B trust
Bypass trust becomes funded with $2.5 million and grows outside of surviving spouse’s estate
Marital trust becomes funded with the other $2.5 million, spouse has full rights and amount will be included in their estate, including appreciation during his/her life.

LINK TO HELPFUL FLOW CHART

Ok, so what happens in 2010 if there does not end up being an applicable credit and estate tax? Essentially, any amount passing through your estate does not have a transfer (estate) tax, even if its say $10 million. This creates an interesting dynamic for the Bypass trust. Bypass trusts are used to maximize the applicable credit and shelter assets from the surviving spouse’s estate, but there is no applicable credit! Two major issues arise and it all has to do with the wording of the trust instrument and how they are directed to fund.

There is a major risk that if your trust directs the Bypass trust to be funded with the maximum amount allowed to be passed free of estate tax you could COMPLETELY DISINHERIT YOUR SPOUSE. While the spouse may be an income beneficiary, they do not receive the remainder interest and have no power to change who does. If the trust is worded improperly, you could have a situation where your entire estate funds in the Bypass trust and the spouse is locked out.
On the opposite end of the spectrum, one may want to take advantage of not having estate tax this year and pass as much as possible through the estate transfer tax free. Sometimes the bequest language use phrases like “applicable credit exemption”. Well there is no applicable credit, so if nothing funds in the Bypass trust, the surviving spouse may be taxed much harder in the future. You lost your one year opportunity to transfer assets free of tax to another generation. Lets say in a non-community property state the spouse only needs 25% of the assets and 75% will go to the kids. In a $10 million dollar estate that is $7.5 million that may be removed without a transfer tax.
The type of assets in your estate and the built in gains are a very important aspect of this planning that I am not going to discuss. This may not be a concern in 2010 with a limited $1.3 million dollar basis step-up which is a large part of the planning. In any event, there is usually a balance between utilizing the applicable credit, the gifting during your lifetime and basis step-ups for eligible assets.

If you have a living trust and estate concerns, you should have your trust reviewed by a CPA or attorney. You may need to change the language in your trust to ensure that your intentions are properly carried out if you pass away in 2010. Even if you don’t, the landscape is currently invisible and a good review would be wise. Important planning can leave your spouse and heirs with a much larger chunk of your estate.

Remember, your situation is unique. You need a professional review if you think this applies to you.

I apologise

2010-11-17T09:34:00.002-06:00

for having been so inattentive to this blog.

Here's an article about tax issues congress needs to resolve quickly. And it doesn't even address inheritance tax, which I will refer to in another post tomorrow.

Congress Faces Long List of Work to Complete in Short Work Period
By Brett Ferguson and Heather M. Rothman
Publication Date: 11/16/2010

Lawmakers returned to Washington Nov. 15 with a full agenda of unfinished business, but a desire for a short lame-duck session could result in short-term fixes needing to be addressed again in the 112th Congress, congressional aides said.

Congress's schedule allows for only about five weeks to complete what would normally take months to accomplish. At the top of the list is the extension of nearly $4 trillion in tax cuts originally passed in 2001 and 2003, an annual “doc fix” to keep Medicare reimbursement rates to physicians from falling, and passage of all of the annual appropriations bills.

The lame-duck schedule calls for a week of work beginning Nov. 15, followed by a one-week break for Thanksgiving, with Congress resuming the week of Nov. 29. Officially, Congress had been planning to adjourn for the year on Dec. 3, but aides now expect Congress to remain in session for an unspecified period of time as lawmakers try to forge deals on the tax issues, appropriations, and other pressing matters.

In addition to extensions of the Bush-era tax cuts, Congress is under pressure to deal with the $35 billion tax extenders package of tax breaks that expired at the end of 2009, a “patch” to keep the alternative minimum tax from affecting an additional 21 million households in the coming months, and a sharp increase in the estate tax.

Power Shift Poses Challenges
Aides said the already difficult task of completing the work also is made tougher because of the Democrats' midterm election losses that will leave Republicans in control of the House in January and Democrats with a diminished Senate majority.

The shift in power in Congress will give Republicans few reasons to accept tough compromises in the coming weeks if they feel they can strike a better deal on extending the tax cuts to higher-income taxpayers when the next Congress begins, aides said, noting there is a good possibility that the tax cuts will be allowed to expire at the end of the year as negotiations stretch on into the 112th Congress.

The most controversial issue remains whether Congress should permanently extend all of the 2001 and 2003 tax cuts, or just those that apply to households earning less than $250,000 per year. Republicans argue that they ran for Congress this year on the promise to make all of the tax cuts permanent and have no intention of allowing the current top tax rate of 35 percent to return to its pre-2001 level of 39.6 percent. They say that the increase would hurt small businesses that pay taxes through the individual income tax system.

President Obama and House Speaker Nancy Pelosi (D-Calif.), however, have been clear that they believe extending the top tax rates would be fiscally irresponsible at a cost of roughly $70 billion per year.

“Our position in the House has been that we support the tax cut for the middle—for everyone, but not an additional tax cut at the high end. It's too costly. Those tax cuts have been in effect for a very long time; they did not create jobs,” Pelosi said Nov. 12.

Paychecks Set to Fall
The stalemate means that, if Congress does not act before Jan. 1, businesses will begin withholding more money from all of their workers' paychecks to reflect the expiration of the 10 percent tax bracket and 25 percent tax brackets, in addition to higher rates for upper-income households.

The tax cut expiration also would slash the value of the child tax credit to $500 from $1,000, reinstate the so-called marriage penalty, and raise the top tax rates on capital gains and dividends. The top capital gains rate would return to 20 percent, while dividends would be taxed at ordinary income tax rates.

Game Plan Unclear
While senators would not reveal much, what is clear is that even committee members are split over how to proceed. While Schumer left room for temporary extensions of some of the tax cuts for top-earning households, committee member Debbie Stabenow (D-Mich.) said she cannot support an extension of the Bush-era tax cuts for anyone making more than $250,000.

“Everyone gets a tax cut,” Stabenow said. “I don't support [one] for the top two rates because that has not created jobs or stimulated the economy in this country and certainly not in my state in the last 10 years.”

Asked how Democrats can get the votes in the Senate without a compromise, Stabenow said, “I guess Republicans have to decide whether or not they hold middle-class people and small businesses hostage for a few very, very wealthy people in the country who have done very well at the expense of everybody else.”

The entire Senate Democratic Caucus will meet Nov. 16 and the bicameral, bipartisan congressional leadership will meet Nov. 18 at the White House with President Obama.

The complete text of this article can be found in the BNA Daily Tax Report, November 16, 2010. For comprehensive coverage of taxation, pension, budget, and accounting issues, sign up for a free trial or subscribe to the BNA Daily Tax Report today. Learn more »

© 2010, The Bureau of National Affairs, Inc.

Proposed 1099 Misc Requirements

2010-05-21T22:38:00.007-05:00

Most folks are aware that the IRS is going to require payment processors like PayPal to issue 1099 K's to payees starting in 2011. This recent article from CNN says recent legislation substantially expands 1099 Misc reporting requirements, so much so that I don't think implementation will be practicable. I'll make it a ptiority to update update this information soon. The most alarming projections are highlighted in bold print below.

Stealth IRS changes mean millions of new tax forms
By Neil deMause, contributing writer May 21, 2010: 1:51 PM ET

NEW YORK (CNNMoney.com) -- The massive expansion of requirements for businesses to file 1099 tax forms that was hidden in the 2,409-page health reform bill took many by surprise when it came to light last month. But it's just one piece of a years-long legislative stealth campaign to create ways for the federal government to track down unreported income.

The result: A blizzard of new tax forms that the Internal Revenue Service will begin rolling out next year.

"It was actually something that we were following back under the Bush administration under the 2008 budget -- we started to see these kinds of rumblings about the 'tax gap' and whether or not businesses were paying their fair share," says Tom Henschke, president of the Pennsylvania-based SMC Business Councils, which was one of the first organizations to call attention to the health care amendment when it was introduced last fall. "So two administrations can claim credit for this."

The first tax-reporting expansion was buried in a different bill, the Housing Assistance Tax Act introduced by House Speaker Nancy Pelosi and signed into law by President George W. Bush in July 2008. Best known for its first-time homebuyers' credit, the bill also created a new addition to the family of 1099 tax forms: the 1099-K.

The 1099 is a catch-all series of IRS documents used to report non-wage income from a variety of sources like contract work, dividends, earned interest and pension distributions. The new 1099-K aims to shine a light on a currently hard-to-track payment stream: credit cards. Starting in 2011, financial firms that process credit or debit card payments will be required to send their clients, and the IRS, an annual form documenting the year's transactions.

The rule comes with a floor to weed out the most casual retailers: The 1099-K is only required when a merchant has at least 200 payment transactions a year totaling more than $20,000. But it applies to all payment processors, including Paypal, Amazon.com, and others that service very small businesses.

The goal of the new regulations is to catch income that is going unreported to the IRS. The federal government loses an estimated $300 billion each year from the "tax gap" between what individuals and businesses owe and what they actually pay.

"Better information reporting helps the tax system work better by ensuring that everyone pays what they owe," IRS Commissioner Doug Shulman explained last year as his agency unveiled the 1099-K. "The new law gives us an important new tool for closing the tax gap and also provides business taxpayers better documentation to compute and report their income and expenses."

For companies that currently report all their credit card and Paypal sales to the IRS, the 1099-K requirement will have little impact. All the paperwork will be done by the bank or payment processing service, and business owners will simply receive a form at the end of the year listing their total receipts.

The 1099 changes attached to the health care reform bill are another kettle of fish. These massively expand the requirements for filing the "1099-Misc" form, which companies use for recording payments to freelance workers and other individual service providers. Until now, payments to corporations have been exempt from 1099 rules, as have payments for the purchase of goods.

Starting in 2012, that changes. All business payments or purchases that exceed $600 in a calendar year will need to be accompanied by a 1099 filing. That means obtaining the taxpayer ID number of the individual or corporation you're making the payment to -- even if it's a giant retailer like Staples or Best Buy -- at the time of the transaction, or else facing IRS penalties.

In essence, the 1099-Misc is having its role changed from a form for tracking off-payroll employment to one that must accompany virtually any sizeable business transaction.

"Just with business travel it would include hotels, rental cars," Henschke says. "Phone service: 1099. Computer service: 1099. Whoever does your postage meter: 1099. You do a little advertising, Yellow Pages: 1099. Your landlord: 1099. You might as well just keep them in your pocket and hand them out as you go around every day."

How did this sweeping provision end up hidden in the health reform bill? No one is willing to take credit for introducing the new legislation, which appeared in the Senate Finance Committee's version of the health bill last fall. Committee chairs Don Baucus, D-Mont., and Chuck Grassley, R-Iowa, both referred calls to committee staffers, who wouldn't comment on the record.

But the provision appears to be a long-in-the-works change that was just waiting for the right moment to be attached to legislation.

Back in 2007, the Senate Finance Committee asked the government's General Accountability Office to conduct a tax-gap study. The resulting report estimated that establishing additional 1099 paper trails for income could provide up to $345 billion annually in new federal tax revenues.

Enter the health reform bill. Last fall, as the debate raged over its projected cost, Congressional supporters of the bill began a desperate search for "revenue enhancers" to bring the net cost down -- and eliminating the 1099 exceptions for corporations and goods was seen as an easy way to bring in more cash without raising tax rates.

House and Senate staffers "essentially have a cupboard full of convenient revenue raisers that they can put into bills when they need it," notes Chris Edwards, director of tax policy studies for the libertarian Cato Institute. In the case of the 1099 changes, he says, "this was sitting around, the IRS wanted it and had testified in favor of it, and they needed a revenue raiser. This was just a convenient thing."

Still, the form the new law took was surprising -- especially the requirement that businesses file 1099s when they purchase goods, which hardly anyone saw coming.

Henschke's group had previously surveyed its members and learned that they average 10 filings a year of 1099 forms, each of which takes about half an hour to prepare. That's in line with the GAO report, which found that a typical small business spent between three and five hours per year filing 1099s.

But SMC's survey found that extending 1099s just to services purchased from corporations would push that number to at least 200 filings per year for a typical small business -- adding an estimated $6,000 to the cost of preparing the average tax return. And that's without even accounting for the requirement that 1099s be filed for purchases of goods, a provision that Henschke's group didn't see coming when it conducted its survey last year.

"These folks are doing their paperwork in the evenings and on the weekends already," he says. "This certainly adds to the burden substantially."

The IRS has a draft version of the 1099-K form available now for public feedback, and will begin requiring the form's use next year. The additional 1099 requirements take effect in 2012. The agency is in the process of drafting its guidance on them.

How To Create a Workplace Recycling Program

2010-05-03T19:39:00.000-05:00

I am fortunate to live in a community that recycles.We have separate bins for recycle and trash. I call it my clean trash and my dirty trash. Separate trucks come by each week to pick up the different bins. Even though I have been recycling for a decade it still surprises me just how much of my trash is recyclable. I would say 50% or more. I wish I could say that all my neighbors participate but some still see it as an inconvenience.

How To Create a Workplace Recycling Program

Choose a Recycling Coordinator
Pick Materials to Recycle
Decide Your Collection Method
Determine How it Will be Hauled Away
Set Up Recycling Bins and Guidelines
Monitor the Program
Promote Your Program Through Education
What Role Will the Custodial Staff Play?
Read Earth911 full article.

Tax-Free Employer-Provided Health Coverage

2010-04-30T10:53:00.001-05:00

I think this is a good thing.

Tax-Free Employer-Provided Health Coverage Now Available for Children under Age 27

IR-2010-53, April 27, 2010

WASHINGTON — As a result of changes made by the recently enacted Affordable Care Act, health coverage provided for an employee's children under 27 years of age is now generally tax-free to the employee, effective March 30, 2010.

The Internal Revenue Service announced today that these changes immediately allow employers with cafeteria plans –– plans that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits –– to permit employees to begin making pre-tax contributions to pay for this expanded benefit.

IRS Notice 2010-38 explains these changes and provides further guidance to employers, employees, health insurers and other interested taxpayers.

“These changes give employers a unique opportunity to offer a worthwhile benefit to their employees,” IRS Commissioner Doug Shulman said. “We want to make it as easy as possible for employers to quickly implement this change and extend health coverage on a tax-favored basis to older children of their employees.”

This expanded health care tax benefit applies to various workplace and retiree health plans. It also applies to self-employed individuals who qualify for the self-employed health insurance deduction on their federal income tax return.

Employees who have children who will not have reached age 27 by the end of the year are eligible for the new tax benefit from March 30, 2010, forward, if the children are already covered under the employer’s plan or are added to the employer’s plan at any time. For this purpose, a child includes a son, daughter, stepchild, adopted child or eligible foster child. This new age 27 standard replaces the lower age limits that applied under prior tax law, as well as the requirement that a child generally qualify as a dependent for tax purposes.

The notice says that employers with cafeteria plans may permit employees to immediately make pre-tax salary reduction contributions to provide coverage for children under age 27, even if the cafeteria plan has not yet been amended to cover these individuals. Plan sponsors then have until the end of 2010 to amend their cafeteria plan language to incorporate this change.

In addition to changing the tax rules as described above, the Affordable Care Act also requires plans that provide dependent coverage of children to continue to make the coverage available for an adult child until the child turns age 26. The extended coverage must be provided not later than plan years beginning on or after Sept. 23, 2010. The favorable tax treatment described in the notice applies to that extended coverage.

Information on other health care provisions can be found on this website, IRS.gov.

If you are a small employer (business or tax exempt) that provides health insurance coverage to your employees there is a simple 3-step form to determine if you qualify for the new Heath Care Tax Credit for Small Business. It can be found on our website at Tax Talk.

Twitter for Small Businesses

2010-04-23T10:14:00.004-05:00

I have been asking myself the question, "Do we want to jump into Twitter?" For me it is a question of time. Do I have the time? My answer is no. I don't think I could do it credit right now but I am definitely interested in what it has to offer and moving in that direction. This is an article that I came across that I found informative. For those who are ready to jump on the twitter train this article will tell you how to get started.

Twitter for Small Businesses

2010 | Apr 21

By Caitlin Childs

photo credit

At last week's Chirp Conference, the official Twitter developer conference, Twitter founder Biz Stone announced that Twitter has over 105 million registered users from around the world and they are adding more than 300,000 new users every day. With staggering numbers of people communicating through this new medium, it should beg the question: have you jumped on the Twitter train yet? And as a business owner, should you?
That's a question that really needs to be answered by your overall marketing strategy. You need to look at how your target market operates and make sure that Twitter is a viable and useful channel to reach them.
To read full article: Twitter for Small Businesses

Cybercriminals Crack the Code to Your Business Accounts « Beancounter Ramblings

2010-04-18T23:01:00.001-05:00

I came across this article while checking out some of the links on one of my favorite sites. I was surprised to find out that business bank accounts are not protected in the same way individual ones are. If you are a business owner and do online banking you should read this article.

Have you ever had your credit card company reverse a charge on your card because it was not you? Sounds reassuring, right? Well, if you are a business owner, those same protections do not extend to you. Cybercriminals know this! Business owners are a prime target of cybercriminals. The cybercriminals target your business using hundreds of thousands of computers in their control, often called bots, short for robots.
It is a business owner’s worst nightmare...
Cybercriminals Crack the Code to Your Business Accounts « Beancounter Ramblings

Getting Started

2010-04-02T08:47:00.002-05:00

Courtesy of the New York Times

Small-Business Guide
How to Register a Start-Up
By KERMIT PATTISON
Published: March 31, 2010

Think registering your business sounds like a perfunctory and insignificant task? Think again.

The registration process forces you to confront a battery of questions that should be part of the bedrock of your business plan. Too often, new business owners regard registration as just another bureaucratic ticket to punch, and they fail to focus on important related steps like claiming a business name, choosing a structure and securing all of the requisite permits. This sort of rush-to-the-wedding approach has become more tempting now that online services allow businesses to do these tasks with little thought.

Unfortunately, these matters can rear up later as trademark disputes, tax problems, bureaucratic snags or costly name changes. “If you treat this as paperwork and box checking, you’re missing some of the issues that will be critical to your business,” said Therese Flaherty, director of the Wharton Small Business Development Center at the University of Pennsylvania. “You ought to be inquisitive about that. If you’re not, it will come back and bite you later.”

Here are some issues you should think through before you register.

THE NAME GAME There are many examples of companies that picked a name without doing the proper due diligence and then were forced to change. This can be costly: You may have to throw out product, packaging, signs, stationery, business cards and all of your branding and marketing efforts. Or you may become embroiled in costly litigation and have to pay damages.

“The first thing you should think about is the name,” said Esther Barron, clinical assistant professor at the Northwestern University School of Law and director of its Small Business Opportunities Center. “Are there going to be trademark issues? Is somebody going to sue you for using that name? Can you stop other people from using it?”

Even small local businesses can be tripped up if they do not get the name right at the outset. Debbi Ramsey, the owner of a spa in Philadelphia, has gone through six names in two years. One choice had been taken. She switched to Bodyworks but customers said it reminded them of an auto body shop. Next she tried One Touch Body and Spa, but she got dirty looks when she went to the city for a permit. “They’re looking at me over their glasses with this ‘touching body’ in there,” she said. “I tried to explain that I do therapeutic massage and guys were coming up to the counter and saying, ‘Yeah, right, where’s your place?’ ”

Eventually, Ms. Ramsey settled on a more wholesome name: Natural Wellness & Spa. But getting the name right cost her more than $1,000 in expenses plus innumerable annoyances. “I had no idea,” she said of the ordeal. “It just added to the drama of starting a business.”

Do an Internet search. Check the United States Patent and Trademark Office database to see if your name is already trademarked. Scan trade association directories in your industry. Check with your county clerk’s office, state department of revenue and secretary of state to see whether your name is similar to that of an existing business. Search your state’s database of corporations and limited liability companies.

If you plan to do business interstate or on the Internet, consult registries in other states. If you plan to have a Web site — and you do plan to have a Web site, don’t you? — check to see if the domain name or something close is available.

In simpler cases, a layman can do the tasks associated with researching a name. good business or university librarian can help immensely. When more is at risk, you may want to hire a business or intellectual property lawyer to assure that an expert has turned over all the right rocks.

Peri Pakroo, a small-business consultant in Albuquerque and author of “The Small Business Start-Up Kit” (Nolo, 2010), suggests that businesses ask themselves a simple question: How disastrous would a name change be? If a change would be catastrophic, you should err on the side of more thorough search and consider hiring a lawyer and trademark protection.

PICK YOUR STRUCTURE Another central question to confront is your type of business entity. The choice should be a fundamental part of any business plan, something you think through before you register.

You must declare your form of entity (sole proprietorship, partnership, corporation or limited liability company) when getting a federal tax identification number and some business licenses. Different types of entities have different regulatory and tax requirements. In general, corporations, limited liability companies and limited partnerships must file with their state. Businesses that do not form corporations may be deemed sole proprietorships or general partnerships by default and have unlimited liability.

OBTAIN A FEDERAL TAX ID Most businesses will need a federal employer identification number — even if they do not have employees. Sole proprietors and some single-person limited liability companies can use their Social Security numbers.

You will typically need an employer identification number for local tax registration forms, federal tax returns and local business licenses. Happily, obtaining an E.I.N. is fairly easy and can be done online or over the phone.

REGISTER A FICTITIOUS NAME Any company with a trade name that does not include the legal names of owners (for sole proprietorships and general partnerships) or the registered name of a corporation, limited liability company or limited partnership name must file for what is known as a fictitious business name (sometimes known as a trade name or DBA). Depending on the jurisdiction, this may be done at the state or county level.

Do not neglect this step. “That’s an important thing, because a lot of times you won’t be able to open a bank account without it,” Ms. Pakroo said.

Again, do your due diligence to avoid name disputes.

FILE REGISTRATION AND PERMITS Now comes the part you have been waiting for — registration. In most areas, businesses must register with the city or county tax collector. This step goes by several names including business-tax application, tax registration or business-license application. This basically allows local governments to keep track of businesses they intend to tax. You will have to pay a fee and, in some jurisdictions, you may have to pay estimated taxes.

In many states, businesses that sell tangible goods must also obtain a seller’s permit that allows them to collect sales tax from customers (service businesses may be exempt). “Do not blow the sales permit off,” said Rich Stim, a lawyer and co-author of “Wow, I’m in Business” (Nolo, 2008). “That would be a big mistake. You’re dealing with tax people, so it will get ugly quickly.”

Some businesses may face additional requirements like planning and zoning boards, regulatory agencies or professional licenses.

ASK QUESTIONS AND LEARN Unfortunately, these processes can be confusing. Ms. Flaherty of Wharton suggests that entrepreneurs view registration and all the related questions as part of the learning and networking of building a business. With that mind-set, a founder will add value to the venture.

“It’s tempting to just think this is a bunch of meaningless paperwork and bureaucracy,” she said. “But it’s a mistake to treat it like that. A little bit of inquisitiveness is important.”

2010-03-30T20:22:00.003-05:00

We all know that referrals are the single most important source of growth.
Here's a few pointers.

Business Networking To Increase Profits
by Charlie Cook
1. For most independent professionals, effective networking should be a driving force, if not the central component of their marketing efforts.

It’s not what you know but who you know that gets you in the door. Over time effective networking can generate a steady stream of referrals and help your business grow.

Your networking strategy can largely replace cold calling, advertising and other less productive marketing efforts.

2. Most people lack an understanding of how to network to fuel business growth or further their careers.

The result is that most people spend too much unproductive time networking with friends and colleagues and have little to show for their efforts. If you’re an extrovert, meeting lots of people may be your idea of fun.

If you’re an introvert, it can be a struggle unless you understand how to network to get more clients. For most people, networking without a clear strategy is like investing by throwing darts at the stock page blindfolded.

3. The primary objective of networking should be gain an understanding of others’ concerns and problems.

Then you can make quick assessments as to whether they would have any interest in the solutions you provide. The objective of networking is not to expound on your credentials.
Most people waste the few precious moments they have with new and existing contacts by focusing on themselves. Better is to spend most of that time asking questions and collecting information.

4. There are many effective ways to network, some far more productive than the typical personal conversation. Its more useful to:

• Have a succinct “elevator speech”, a 30 second description of the problems you solve, is an essential networking tool.
• Use questions to identify individuals primary concerns and at least one piece of personal information.
• Refer your contacts to people in your network who can solve their problems. The benefit of this approach is twofold. First, you’ll be seen as a problem solver, and second, those people who benefit from your referrals are more likely to provide you with referrals in return.
• Provide valuable information on a regular basis for free. A weekly or monthly newsletter is one way to establish your credibility. When this missive provides solutions, it will be shared by people in your network, further lengthening your list of contacts.

5. Most people rely on serendipity for results. It certainly doesn’t hurt to let people you meet know about the types of problems you solve, but if you want to get better results and increase business, target your networking.

Identify the people you want to make contact with, whether prospects or potential marketing alliance partners, and make carefully researched efforts to build relationships. This approach takes more time on your part, but it gets results.

6. Your networking efforts will be a waste of time without effective data management. When you meet or contact people, enter the information you learn into your contact management software; make note of their interests, what you’ve shared with them, and when and how to contact them next.

7. People have short memories. Follow-up regularly with members of your network or they’ll forget you exist and more importantly they’ll forget that you are the best person to solve their financial, legal, human resource, design, or other problems. Contact the people in your network in some way at least once a month.

Did You Get This Email?

2010-02-12T15:37:00.004-06:00

Here's an oldie but goodie that's been making the rounds since 2005.
Here is the message in question:
REMEMBER: Cell Phone Numbers Go Public next month.  

REMINDER.... all cell phone numbers are being released to telemarketing companies and you will start to receive sales calls. 

.... YOU WILL BE CHARGED FOR THESE CALLS  

To prevent this, call the following number from your cell phone: 888-382-1222 .. It is the National DO NOT CALL list . It will only take a minute of your time. It blocks your number for five (5) years. You must call from the cell phone number you want to have blocked. You cannot call from a different phone number.  

HELP OTHERS BY PASSING THIS ON TO ALL YOUR FRIENDS... It takes about 20 seconds.

?Are telemarketers really chomping at the bit, waiting for cell phone numbers to go public next month? In a word, NO.

First of all: There's no such thing as a complete, nationwide directory of cell phone numbers. Several so-called "Wireless 911" services have tried to get off the ground, but without much success—and besides, Wireless 911 directories are opt-in only, meaning that callers who do nothing wouldn't be included.

Next: There's no deadline for registering your cell phone on the federal "Do Not Call" list, and thanks to recent legislation, all numbers on the list will stay there permanently, not just for five years.

Finally: Keep in mind that the FCC already bans telemarketers from using automated dialers to call cell phone numbers—and since automated dialers are "standard in the industry" (as the FTC puts it), that essentially puts the kibosh on 99.9 percent of cell-phone telemarketing calls.

So no, your cell phone number is NOT going public next month, and the next time someone forwards you a warning that it is, please nip that message in the bud.
(paraphrased from Yahoo.tech)

It is still a good idea to get your phone registered to prevent those unwanted calls.
You can go to the Federal Trade Commission site to read about it for yourself.
You can visit the National Do Not Call Registry to register on-line.

Read more at About.com: Urban Ledends

Quickbooks at ECC and payroll tax audit warning

2010-01-17T17:07:00.007-06:00

My associates Jose and Janett are Quickbook ProAdvisors and received an invitation to attend a Chicagoland ProAdvisor group meeting on January 26th at Elgin Community College. Last month Jose and I attended a meeting in Chicago at which Quickbook experts gave us an introduction to the features of the 2010 version, and we felt that presentation was excellent. I've asked Janett to ask the hostess for next week's meeting if I can come along. I mention these meetings in case any readers have purchased or are considering purchasing Quickbooks, and are concerned about whether customer support is available. My experience indicates that Intuit is well aware of the need for excellent customer support services, and will be available at every opportunity to assist customers. Besides local meetings such as I've described, on line and phone assistance is also available.

On a not so pleasant note I came across this article at Idomenei Enterprises web site:

"Payroll Tax Audit

The IRS is launching a nation wide employer audit in February 2010. Are you prepared?

What are they looking for?

Accurate records and payment of Federal withholding taxes, such as Social Security, Medicare and Federal Unemployment.

Worker classification – are your workers properly classified. Independent contractor status will be closely reviewed.

Fringe benefits – health plans, life/accident benefits, educational assistance, meals, transportation benefits. All will be carefully reviewed for proper documentation and determination as to whether they are considered taxable wages.

Reimbursed expenses – your expense policy and process is subject to audit.
Compensation of Owner Employees – proper payment to owners of closely held corporations.

Forms – completeness and accuracy of various forms, including W-2s

6,000 employers will be randomly selected for this initial audit. And, as Federal and State agencies look for additional sources of funding, the frequency of audits is expected to increase dramatically.

In September the US Government Accountability Office (GAO) released a report urging the US Department of Labor and the IRS to increase ‘their efforts to probe the improper classification of workers” as independent contractors."

You're welcome to call us at (847) 401- 2431 if you are uncertain or concerned as to whether you would be vulnerable to such an audit.

The IRS and the ARRA

2009-12-02T15:54:00.002-06:00

Here's a link to the IRS publication explaining provisions of the American Recovery and Reinvestment Act which explains the act's importance to individuals and business taxpayers. I've copied the front page of the publication below for readers to review for items of possible interest. Expansion of Sec 179 allowance for the deduction of purchases of new and used equipment is one item worth reviewing. Extending the roll back period for losses is another. If you visit the linked site and click on captions of interest you may learn more. Feel free to give us a call for guidance in areas you think might apply to tour 2002 tax return.

The American Recovery and Reinvestment Act of 2009: Information Center

Updated Nov. 6, 2009: The newly-enacted Worker, Homeownership And Business Assistance Act Of 2009 extends and expands the first-time homebuyer credit.

Información en Español

Information for Individuals
Some of the provisions of the law primarily affect individuals.

Making Work Pay Tax Credit. This tax credit means more take-home pay for many Americans. To make sure enough tax is withheld from their pay, taxpayers can use the IRS withholding calculator. See Making Work Pay for more.

First-Time Homebuyer Credit Expands. Homebuyers who purchase in 2009 can get a credit of up to $8,000 with no payback requirement. New legislation extends and expands this credit.

Money Back for New Vehicle Purchases. Taxpayers who buy certain new vehicles in 2009 can deduct the state and local sales taxes they paid or other taxes and fees they paid in states with no sales tax.

Education benefits. The new American opportunity credit and enhanced benefits for 529 college savings plans help families and students find ways to pay higher education expenses.

Enhanced Credits for Tax Years 2009, 2010. Find details on the earned income tax credit and the additional child tax credit.

Increased Transportation Subsidy. Employer-provided benefits for transit and parking are up in 2009.

Up to $2,400 in Unemployment Benefits Tax Free in 2009. Individuals should check their tax withholding.

$250 for Social Security Recipients, Veterans and Railroad Retirees. The Economic Recovery Payment will be paid by the Social Security Administration, Department of Veterans Affairs and the Railroad Retirement Board.

Energy Efficiency and Renewable Energy Incentives. See what individuals can do to reap tax rewards.

Health Coverage Tax Credit. The credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.
Information for Businesses
Some of the provisions of the law primarily affect businesses.

Making Work Pay Tax Credit. Businesses should use the new withholding rates for their employees. For pension plan administrators, new optional withholding procedures are available to supplement the February withholding tables.

Work Opportunity tax credit. This newly-expanded credit adds returning veterans and "disconnected youth" to the list of new hires covered by the credit that businesses may claim. Businesses have until Oct. 17 to request certification for the tax credit for some new hires.

COBRA: Health Insurance Continuation Subsidy. The IRS has extensive guidance for employers, including an updated Form 941, as well as information for qualifying individuals.

Energy Efficiency and Renewable Energy Incentives. See what businesses can do to reap tax rewards.

Net Operating Loss Carryback. Small businesses can offset losses by getting refunds on taxes paid up to five years ago. Information on the carryback, an expanded section 179 deduction and other business-related provisions, is now available.

Municipal Bond Programs. There are new ways to finance school construction, energy and other public projects.
2008 and 2009 Tax Returns
The law could affect some 2008 tax returns due in 2009. However, most of the changes in ARRA will affect 2009 individual tax returns filed next year and due April 15, 2010.

Way to go, Kids

2009-11-13T18:39:00.002-06:00

FromNBCChicago.com

Local Community College Beats Yale
Elgin Community College takes down Ivy League school in mock trial competition
By DICK JOHNSON and ANDREW GREINER
Updated 7:08 PM CST, Tue, Nov 10, 2009

They might object to a David and Goliath comparison but, then again, as their twitter message said yesterday ...

"WE BEAT YALE!!!!"

Elgin Community College’s Mock Trial team didn’t win the Harvard Crimson Classic this year, but they did trounce a practiced Ivy League competitor -- no mean feat, considering Elgin completed its first full mock trial season just last year.

"What allowed the students to [beat Yale] was dedication," said coach Ron Kowalczyk. " That's the bottom line. Hard work."

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ECC was one of 11 teams participating in the annual two-day event, which usually pits Ivy League types against each other in a faux courtroom setting.

The team from ECC wasn’t even allowed into the tourney until a regular team dropped out and they got a call to fill in.

So ECC made the best of it during their weekend run, beating Villanova in the first round, losing to Brown in the second round, beating Yale in the third round and losing to Princeton in the finals.

Brown, which barely beat ECC in the second round, went on to take the tournament.

For the coach who put together the Elgin team, the victory was a shocker.

"I would say we were stunned. You never know in the end how the judging is going to come down,” Kowalczyk said.

Kowalczyk has good reason to be amazed. Two years ago he didn’t even have a team – an interested student asked him to create one in 2007 – and he wasn’t even on Harvard’s radar.

But that didn’t stop him from writing letter upon letter until the stodgy university put his team on the waiting list.

And once that happened, Kowalczyk – and students Anastasia Toufexis, Jennifer Rieger, Rebecca Day, Jessica Bianchi, Elizabeth Martzel, Eleni Bala, Robert Dalin, Rita Russo and Mary Burke – shocked the upper crust with their come-from-nowhere performance.

"I was beaming thoughout this whole period and I still have not gotten my face back from the beam!" said Elgin president David Sam.

ECC's team celebrated with a nice dinner in Boston.

Overall, they had a better record than Boston College's "A" team, Wake Forest, Boston University, Dartmouth's "A" and "B" teams, and Wellesley's A&B teams. ECC also tied Penn State, the Herald notes.

The ECC squad has a few more tournaments before heading to the American Mock Trial Association regionals in February.

As for Yale, a spokesperson said ECC's victory was "impressive."

"I'm sure their reputation will precede them next time."

Financing

2009-10-30T13:31:00.003-05:00

I'm passing along a recent email from the folks at SCORE. That organization provides great mentoring to entrepeneurs and a calendar of events and instruction you may wish to monitor. Here's a link: www.scorefoxvalley.org/

Borrowing from Friends, Family Requires Wise Management

Friends and family are an invaluable source of support for the aspiring small business owner. And often, they're an invaluable source of financial assistance as well.

In fact, more small businesses rely on loans from friends and family than any other funding source. Familiarity with the person and his/her business goals, the investment opportunity, and the ability to monitor the venture's progress are among the major reasons why friends and family members willingly contribute to a start-up or expansion.

However, a ready source of cash is not without its potential pitfalls. Business loans from family and friends also can be a disaster if they are not done right. Unstructured or loosely structured financing and payback terms can haunt both sides later on. Research shows that 14 percent of business loans from family and friends go into default, compared to about one percent for bank loans.

To increase the odds of success, approach family and friends with a detailed loan proposal, including financials from your business, just as you would a bank or venture capitalist. Be frank about the risks. If things go badly, they could lose all or some of their money. Consider the consequences of a soured business deal to your relationships.

Pick a financing structure that works best for your business and make certain everyone understands it. Specifically, be clear on whether the deal involves an ownership stake in your business, or whether it is a simple debt you plan to repay. And be clear about repayment terms.

To legally seal the deal, use a document such as a "Promissory Note." Putting the terms of your borrowing agreement into proper legal form is crucial. You can find the downloadable legal documents you need, including many different Promissory Note variations, at www.findforms.com. Self-help legal publisher Nolo also offers loan forms and related information at www.nolo.com.

Another helpful resource is Virgin Money at www.virginmoneyus.com, previously known as CircleLending.com before it was acquired by well-known entrepreneur Richard Branson. Virgin Money helps small business owners avoid the problems that can arise with loans from friends and family by providing loan administration, recordkeeping, payment processing and structural support. The service emphasizes flexibility to meet the needs and concerns of both borrowers and lenders, from terms and interest rates to repayment strategies.

To learn more about financial issues facing your small business, contact SCORE "Counselors to America's Small Business."
The Fox Valley SCORE Chapter offers free, confidential counseling to small businesses, including startups. Affiliated with the U.S. Small Business Administration, SCORE has counselors available in nine locations in the counties and suburbs west of Chicago.

We look forward to helping you work out financing possibilities for your business.

Sincerely,

The Counselors at SCORE

Frist-Time Homebuyer Credit

2009-09-18T20:21:00.003-05:00

Ten Facts about the First-Time Homebuyer Credit

Many taxpayers who purchase a home this year will qualify for an $8,000 federal tax credit. The refundable first-time homebuyer credit is a major tax provision in the American Recovery and Reinvestment Act of 2009. But time is running out to qualify for this credit.

Here are ten things the IRS wants you to know about the first-time homebuyer credit:

1. To be considered a first-time homebuyer, you and your spouse if you are married – must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.
2. You cannot claim the credit before there is a completed sale and purchase of the residence. The sale and purchase are generally completed at the time of closing on the purchase.
3. To qualify for the credit, the completed purchase must occur before December 1, 2009.
4. The home must be located in the United States.
5. The credit is either 10 percent of the purchase price of the home or $8,000, whichever is less.
6. The amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000 or $150,000 for joint filers.
7. The credit is fully refundable. A homebuyer with no taxable income, who qualifies for the credit, may file for the sole purpose of claiming the credit and receive a refund. The credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
8. The credit is claimed on IRS Form 5405, First-Time Homebuyers Credit.
9. Taxpayers can claim the credit for a qualified 2009 purchase on either their 2008 or 2009 tax return. For those who have filed a 2008 return, a Form 1040X, Amended U.S. Individual Income Tax Return can be filed in order to get a refund in 2009.
10. The credit for qualified 2009 purchases does not have to be repaid, as long as the home remains your main home for 36 months after the purchase date.

Qualified taxpayers who have been considering a main home purchase may find extra incentive from this tax credit to buy now so they can complete the purchase before the December 1 deadline.
Links: YouTube video: English-Spanish

How are you financing?

2009-08-26T15:06:00.004-05:00

In addition to the article. I'm copying readers comments as well.

My experience is that small business creditors including vendors, credit card companies, and line of credit lenders, are all reducing availability, at a time when internal cash flow is deteriorating.

Commentor 2 refers to his "preselling" strategy, which is a good idea but may be an option limited to E Commerce. Most small business owners have probably already evaluated the possibility of internet sales, but now would be a good time to re-evaluate that model.

I work with sub-contractors who are already cash strapped, paying down vendor balances from 60 to 30 days, and meeting their payrolls. They also need to try to arrange prepayments, asking their best customers to pay in advance for material purchases on any job which will extend beyond their vendors terms.

Service providers have the advantage of not having to invest in materials or carry substantial receivables, but they will have to carefully review their expenses and redouble their sales efforts.

From the New York Times, Your the Boss Column

August 25, 2009, 9:00 am
Has the Recession Changed How Small Businesses Are Financed?
By Scott A. Shane
Recently, many people have been wondering if the poor economy has changed how small businesses are financed. Discover Card Financial Services has identified one interesting change.

The company looked at how small businesses were being financed before the recession and how they are being financed now. Ryan Scully, director of Discover’s business credit card, explained that the sources of financing for small businesses didn’t really change between June 2007 and June 2009. In both periods, Discover found, the same percentage of business owners used personal savings to finance their new businesses and similar percentages used credit cards and bank loans.

There was a change in whether or not founders of small businesses needed external financing to start their businesses. Mr. Scully explained that in June 2009 only a third of business owners needed to obtain financial capital to start their companies, substantially fewer than in June 2007.

While it’s possible that Discover’s findings show that entrepreneurs who needed financing couldn’t get started, the company’s analysis fits what many academics believe happens when credit gets tight — many owners change their business models so that they can rely less on external financing. This allows them to persist in their entrepreneurial efforts despite the tighter credit conditions.

I’m wondering if your experience jibes with this pattern, or if you’ve experienced something different. Since the recession began, have you changed the way you finance your new business? If so, what are you doing differently?

Scott A. Shane is a professor of entrepreneurial studies at Case Western.
-------------------------------------------------------------------------------
COMMENTS

Link
Look, eveyone is paying later. Which mean I have to pay more for what I borrow because of the lag time. Also, I have to make this ups by receivble financing which means I make less profit and in turn have to either take my prices up to capture some of this lossor or eat it in hopes that my business won’t drop off more. My strategy is to tread water for now, hope I can capture some of my competitors business and take my price up as the competiton drops in about a year or two..

— Marty

2. August 25, 2009
11:47 am

Link
When I started a similar business in 1992, I did it solely with credit cards and was rewarded with obscenely high credit limits. With this avenue closed this time around, I am pre-selling (allow 7 days for delivery). I deposit the clients funds, and with this capital I make my purchases.

G.A.Landry
Green Planet Meatz
Denville, NJ

— Greg Landry

3. August 25, 2009
12:11 pm

Link
I started my business in 2006, and at the time, I had no need of external financing.

With the recession, my business is down and I chewed through my savings faster than I would have liked. Now that I could really use external financing, I find it’s harder to come by. Companies that were begging me to take out loans are now not interested.

Like most entrepreneurs, I’m trying to be creative to keep the business alive. My husband and I have seriously cut our living expenses and to get through, I’ve also been relying on personal credit as my rating has always been stellar.

But here’s the rub… With new credit laws in effect, I find that credit companies are still finding ways to make money. I enjoyed low apr’s and no additional fees because of my rating. To compensate, my credit cards are now requiring higher minimum payments at a time when I am trying to keep monthly expenses lean. Before, credit companies punished bad behavior, and rewarded good behavior. Now they’re looking to make up for losses from everyone.

The bottom line, I will do what I need to in order to weather the storm. But at a time when small businesses could use a little help to get through, there’s none out there.

Maria

— Maria

4. August 25, 2009
12:23 pm

Link
I looked into a franchise and after serious thought, recognized it was a loser. The up front money, forty grand, would eventually be paid back, but I cannot tolerate debt.

I just read about a woman who lost her job and savings at Enron, but found a niche, and it only cost her a grand to start it up. She holds magnificent tea parties for little girls’ birthdays and all it took was some cute furniture she found at yard sales and lots of old linen. She managed to clear $25K after her third year.

How about some tea and sympathy? Tea Parties for Non-Tea Potty Little Black Bag Handlers who want to share stories of deprivation, not imagine them.

— Abby Tucson, AZ

5. August 25, 2009
5:48 pm

Link
All business owners,and in particular those start up will generally have more difficulty because all though security requirents have increases, finacial institutions will ve looking repayment through proven profit generation. This is demonstrated through ome’s net worth statement or work experience. Look towards financial institutions looking past the working relationship for even loan renewals.

— Terry jackson

6. August 26, 2009
10:23 am

Link
The tightening of credit will push would be entrepreneurs to more carfully study gaps in the market and real opportunities. When monehy was looser, one could have explored only ideas or developed a me-too business.

Hopefully the focus on better business models will create a new generation of stronger small businesses.

Domenick Celentano
Silberman College of Business
Fairleigh Dickinson University, Madison, NJ

— Domenick Celentano

The Business Plan

2009-07-21T22:17:00.009-05:00

The website Articlebase provided this interesting guidance on preparing a business plan. While the writer refers to a bookkeeping business, her ideas are pretty much transferrable to other business models, and the simplicity of her approach will not intimidate the new business person.

Admittedly, a bookkeeping business does not usually have to present the plan to potential investors or lenders, and if your business involves manufacturing costs, or a distribution network, or the roll out of a new product, you will have to provide details for those aspects of the plan, and flesh out the plan with projections, analysis, and a roster of key persons. However, even for those requiring a more rigorously developed plan, I think the "one page" approach is a good place to start, and then to be developed.

Here's a link for advise on developing the kind of business plan you may eventually need to take to the bank or prospective investors, but please constuct a one page plan first. I especially like the authors advice regarding the "vision statement". At this point you should not be toning down your optimism for fear of skeptical reviewers.

PS One other thing. I like to recall the words of one self starter. I don't try to figure out what I can do, or what I like to do; I think of what I would pay someone to do.

The One-page Business Plan for Your Bookkeeping Service

Author: Linda Hunt

Sometimes the thought of sitting down to draft a business plan sends me running for the hills, even though I preach the importance of planning to all of my clients! Small business advice: Without planning, your bookkeeping business goes nowhere fast. When you fail to plan, you plan to fail

What I have come to learn as a business coach is that business plans don’t have to be long to be good. In fact, a single page can contain all the essential elements you need to show where you’re taking your bookkeeping business and how you’re going to get there. The most important reason to have a business plan is to clarify your thinking about where you are taking your business. When it’s in writing, others will know and understand your vision and your plan

Here are a few characteristics of an effective one-page business plan for your bookkeeping business.

• Simplicity. A one-page plan takes a complex subject and makes it simple

• Focus. It focuses on what’s important. There is no room for fluff or filler.

• Versatility. It is a communication tool for employees, prospective employees, partners, shareholders, investors and bankers.

• Consistency. It sends the same message to every person who receives it, unlike a verbal presentation, which may change every time you speak.

• Flexibility. It is easy to change and update.

The Five Elements of the One-Page Business Plan

1. The Vision Statement – What are you building
This is the place where you describe your vision —your way. Most business coaches will tell you that vision statements should be expansive and idealistic. They should stimulate thinking and communicate passion, while painting a detailed picture of the bookkeeping business you want. The key to capturing your vision is to refrain from restricting the flow of thoughts.

2. The Mission Statement – Why does this business exist
The mission statement describes the purpose for which your product, service or business exists. Great mission statements are short and memorable. They communicate in just a few words the company’s focus and what is being provided to customers. They answer the question, “Why will customers buy this product or service?” The mission statement should also reflect the owner’s passion and commitment. When the business satisfies an owner’s passion for creativity, independence or the need to serve, there is substance and staying power in the mission.

3. The Objectives – What results will you measure
Objectives clarify what you are trying to accomplish in specific, measurable goals. Some of the best small business advice that I can give you is this: for an objective to be effective, it needs to be a well-defined target with quantifiable, measurable elements. There are many types of objectives, and your plan should include a variety of them. For many businesses the two most important categories will be the financial and marketing objectives. It is important, however, to tailor your objectives to cover the full scope of your bookkeeping business, focusing on the goals that are most critical to your success

4. The Strategies – How will you grow your business
Strategies set the direction, philosophy, values, and methodology for building and managing your company. Strategies also establish guidelines for evaluating important business decisions. In most industries there are four to six core strategies that successful businesses follow. These core strategies are easy to understand, remain relatively constant over time, are used by market leaders and result in profitable growth. Here are two examples of a core strategy: “Price isn’t everything,” and “Attract the very best employees and give them a stake in the business.” What are your strategies

5. The Plans – What is the work to be donePlans are the specific actions the business must implement to achieve the objectives. Plan or action items should contribute to the growth of your bookkeeping business. Each plan or action item is, in effect, a project. Plans should be action-oriented, list specific tasks and have definitive deadlines or due dates

Once your plan is in writing, it is now time to put that same plan into action. Putting the plan into action is the most important step because the actions deliver the results you wanted when you started this process. For most entrepreneurs, this is easy — you are already action-oriented!

Here is some business advice, as well as a few suggestions, to help you put (and keep) your bookkeeping business plan in action
• Keep the plan with you.
• Use it as a decision-making tool.
• Update it with new thoughts.
• Share it with people you trust and whose opinions you value.
• Measure your progress at least quarterly.
• Prepare a budget to match the plan.
.

LLCs and S Corps

2009-07-02T11:43:00.005-05:00

Folks have been talking to us about LLC's (limited liability companies)as an alternative to the more familiar business organizations, such as partnerships and either S or C corporations. Since the state charges for registering an LLC are roughly double what they would be for the other forms of organization, I tend to question the perceived advantages to our clients. I'm attaching an article which provides a comparison of advantages of the business forms.

Most importantly, "members" (shareholders) of an LLC can be other LLC's, corporations, partnerships or individuals; the number of members is not limited by law, and alien non-residency status is not a bar to membership. To me it appears the best opportunity to benefit from the LLC business form is for rental real estate owners who can set up each property as a separate LLC, limiting liability arising from any one property to that property only. The state of Illinois allows registration of Series LLC's, whereby a parent LLC and several subsidiary LLC's (eg separate properties)can be set up with one registration.

Tax advantages are hard to identify, since the Internal Revenue Service has not treated LLC's as a distinct business form, and LLC's have the option of filing federal returns either as corporations or partnerships.

S Corp. Notes (abstracted from My Corporations Weblog site)

Let’s First Start off with Explaining What an S-Corporation is….An S-Corporation begins its existence as a general, for-profit corporation upon the filing of Articles of Incorporation at the appropriate state office. Once formed, a general for-profit corporation that has not requested “S-Corporation Status” with the IRS will be required to pay income tax on taxable income generated by the corporation. In addition, any dividends distributed to shareholders may be subject to taxation as dividend income to that shareholder as well (hence the problem of “double taxation” that can occur in a ‘Non-S-Corporation’). However, after the corporation has been formed, it may elect “S-Corporation Status” by timely submitting IRS form 2553 to the Internal Revenue Service. Certain states require that your corporation file state-specific forms to qualify for S-Corporation status in that state for state taxation purposes. In addition, S-Corporation status is not available for purposes of state tax liability in certain states. Please contact your state’s taxing authority for further information. Once this filing is complete, the S-Corporation is taxed in a manner similar to a sole proprietorship or partnership, rather than as a separate entity. Thus, the income is “passed-through” to the shareholders for purposes of computing tax liability. Therefore, each shareholder’s individual tax return will report the income or loss generated by the S Corp.

Who typically elects S-Corporation status? Most entrepreneurs prefer the S-Corporation structure for the following reasons: • The S-Corporation combines many of the advantages of the sole proprietorship, the partnership, the corporation, and the LLC into one entity. • Unlike sole proprietors and partners in a partnership, shareholders of an S-Corporation are afforded the same level of limited liability and personal asset protection as are the shareholders of a general, for-profit corporation. • In an S-Corporation, shareholders avoid the “double-taxation” common to shareholders of non-S-Corporations because all income or loss in an S-Corporation is reported only one time on the personal income tax returns of the S-Corporation’s shareholders. Where a corporation claims income from a passive investment (e.g. from real estate owned) for three consecutive years that exceeds 25% of the corporation’s gross receipts, S-Corporation status may be terminated by the IRS. Most real estate investors, for example, prefer placing real property in an LLC (Limited Liability Company) rather than an S-Corporation for this very reason.

Are There any Requirements to Qualify as an S-Corporation that I should know about? To qualify for S-Corporation status, the corporation must • Be filed as a U.S. corporation. • Maintain only one class of stock. • Maintain a maximum of 100 shareholders. • Be comprised SOLELY of shareholders who are individuals, estates or certain qualified trusts, who consent in writing to the S-Corporation election. • NOT have a shareholder who is a non-resident alien. Please note that failure to observe ANY of the above requirements could revoke S-Corporation status.

That Sounds Great but what are the differences between an S Corporation and an LLC? While on the surface the S-Corporation and the Limited Liability Company (”LLC”) may seem similar, but please note the following very significant distinctions. The following are some of the differences between the two types of corporate entities: • S-Corporations are limited to 100 shareholders, while LLCs have no limit to the number of members. • S-Corporation shareholders must ALL be individuals who are U.S. citizens or permanent resident aliens. LLC members (owners) may be individuals, corporations, partnerships, many trusts, and even non-reident aliens.

Are there any Tax Advantages to forming an S-Corporation? In an S-Corporation, only earnings actually paid out to an owner as compensation for services are subject to payroll taxes. Any money left in the business for reinvestment or distributed to the shareholder as a dividend is not subject to payroll taxes…and not subject to self-employment tax. Let’s review an example: “John” operates his business as an unincorporated, sole proprietorship. John has a net income (gross income less expenses) of $60,000 during the year. During the course of the year, John withdraws $40,000 as his personal salary leaving the remaining $20,000 in the business. If John operates as a sole proprietorship, he’ll owe self-employment tax on the full $60,000 (($60,000 x 15.3% = $9,180). However, if John forms a corporation, elects S-corporation status, and withdraws the same $40,000 as compensation for his services, he would only owe self-employment taxes on the $40,000 in salary ($40,000 x 15.3% = $6,120). Thus, forming an S-Corporation would save John $3,060 in payroll/self-employment taxes.

Couldn't wait to share this one...

2009-06-21T10:52:00.003-05:00

Happy Father's Day.

I found this article at a site called Open Forum. The site appears to be maintained by American Express, and they provide a lot of good material. I'll be going back there.

Your Staff is the Key to Referral Success

John Jantsch April 21st, 2009 - 07:36 PM

Here’s something your customers won’t ever tell you, but you better understand - Your employees are probably treating your customers about the same way you are treating your employees. Soak that in a minute and process the impact that might have on your organization’s ability to generate referrals.
Organizations that easily generate a high number of referrals hire for referral factors and treat their people as the prime target customer. It makes sense of course, happy employees are much more likely to represent the brand in a positive manner.
In all but the most technical positions, much of what employees do on a day to day basis can be taught. It’s much harder, however, to teach someone to be trustworthy, to give or to serve, yet, as stated above, these are key traits of organizations that generate referrals. A habit of referral for any organization that has more than two or three employees then is entrusted to the actions of the entire staff.
Mike McDerment, founder of FreshBooks, an online time tracking and invoicing service located in Toronto Canada shared these thoughts on how he addresses the customer, employee relationship, “First, we try to find people for fit, shared values and a passion for excellence. That doesn’t mean we have some preconceived idea of what they look like. It’s more that they match our brand in some way. We’re not in the billing business, we’re in the service business and we like to have fun. It really makes things easy if we surround our customers with employees that like to serve and like to have fun.”
The final element of the employee as customer habit lies in the word empowerment. While the word empowerment shows up in almost every book ever written about management, it’s a term that is easy to say but not so easy to put into action.
In the 1999 book, First, Break All The Rules: What The World’s Greatest Managers Do Differently, Marcus Buckingham and Curt Coffman published findings from research conducted by the Gallup Organization involving 80,000 managers across different industries.
The primary thesis of the work was that if a company could not satisfy an employee’s basic needs first, it could never expect the employee to give stellar performance.
The research found that a productive employee’s basic needs are: knowing what is expected at work, having the equipment and support to do the work right, and answering basic questions of self-worth and self-esteem by receiving praise for good work and development as a person.
Highly referred companies place so much focus on delighting customers that employees grow to understand that the primary thing that is expected, and even measured, is attaining referrals from every customer.
When this expectation is then reinforced with tools that allow the focus to be on the outcome as much as the process, they often learn to do whatever it takes to get a positive result.
This can be one of the hardest adjustments a small business owner can be forced to make as their business grows.
Larry Ryan founded Ryan Lawn and Tree in the Kansas City area over twenty years ago. He started out on the back seat of a tractor and steadily grew the business by taking care of his customers and employees.
Today, he is the CEO of one of the largest lawn services in the Midwest with over 150 employees and he still admits, “The hardest job I have is getting out of the way and letting my people do what they need to do.”
Although Ryan may claim that empowering employees is still hard for him he has always run his business with the philosophy that every customer will be thrilled and almost no matter how illogical the demand he would try to make it right in the eyes of the customer. He will tell you that this philosophy has caused him to scratch his head in disbelief at times, but he can also recount hundreds of instances when thrilled customers have voluntarily written him notes expressing how incredible it was that their turf manager came back on their own accord to redo a patch of grass that just didn’t work out right.
He hires for personal fit and talent, his employees are 100% certain what is expected of them, and given the tools, permission, and encouragement to take matters into their own hands to achieve the ultimate objective.
As a result his business, generated primarily through referral, has grown steadily year in and year out.

Another good article from AccountantsWorld

2009-06-19T21:16:00.002-05:00

As you may know, the founder of our company, Jose Martinez is a native of Mexico, and our firm serves a substantial Hispanic clientelle. We feel Hispanic small businessmen have considerable growth opportunities as they serve consumer markets within and outside their own communities.

Thriving on Mexican-American Market

MEXICO'S economy has suffered a series of blows in recent months -- drug violence, swine flu and the worldwide economic downturn. Yet some companies on each side of the border with the United States are prospering because they serve the expanding Mexican-American market in the United States.
A new economy is emerging that builds on the economic relationship between the countries. Exports and imports between Mexico and the United States have grown rapidly in the last decade, to close to $400 billion annually. And now trade is taking on new complexity, with operations in Southern California sometimes serving as Mexico's link to the global economy.
Viz Cattle Corporation, for example, the American division of Mexico's SuKarne Global, handles exports of Mexican beef to Japan and South Korea, through contracts made in Compton, Calif. The beef originates in SuKarne's home base in Culiacan, Sinaloa, in northwest Mexico. ''Japanese and Korean executives buy here, and they go to inspect the ranches in Mexico, too,'' said Jesus Tarriba, manager of Viz Cattle's warehouse operation in Compton, in southeast Los Angeles County. ''Last year we sold $40 million of beef to Japan and Korea and $80 million here in the U.S.''
Viz Cattle has grown rapidly, from less than $10 million in revenue five years ago to $120 million in 2008. And it is doing well this year despite the downturn, Mr. Tarriba said. Its main business is importing beef from Mexico for American restaurants and retailers. ''We specialize in smaller cuts of rib-eye and strip steaks because Mexican ranches slaughter livestock at younger ages than American ranches,'' Mr. Tarriba said. ''Restaurants like those cuts.''
Viz Cattle and other food companies on the border have also capitalized on the expanding Latino population across the United States and the changing tastes of the public.
''Chipotle was unknown here five years ago,'' Marcelo Sada, president of Source Logistics Center Corporation, said of the smoked jalapeno pepper in many Mexican foods and sauces. Mr. Sada's company, based in Montebello, Calif., imports bakery and soft drink products from Mexico.
Martinez Brands/Tequila Holdings Inc., from Pasadena, Calif., has also been a beneficiary of the growing American taste for Mexican products. ''Tequila is the fastest growing liquor variety in the United States for the last seven years,'' said Javier Martinez, president of Martinez Brands. ''And why? Because young Americans vacation in Mexico and associate tequila with fun, freedom and friendship.''
Business is good as well, for Inter-Con Security Systems, a company also based in Pasadena, that protects State Department installations in the United States and abroad as well as private businesses, hospitals and sports arenas, said Carlo Gobelli, who leads Mexican operations. ''Security is in very great demand, to guard executives and company operations and also shipments of goods,'' Mr. Gobelli said..
Inter-Con employs 6,500 people in Mexico; the company has 30,000 employees over all. ''A new concern here,'' Mr. Gobelli said, ''is that we are getting demands to protect pharmaceutical laboratories against theft of key ingredients that drug gangs can use.''
Still, some companies are seeing a more mixed picture. ICS Group Inc. of Rolling Hills Estates, in southwest Los Angeles County, represents Carlisle Companies' roofing and building products in Mexico and Latin America, said, ''Right now, American companies are holding back from investing in Mexico and are not sending their personnel because of dangers from the drug wars,'' said Mark Aston, the president of ICS.
But he credited business in the Caribbean with helping the company's annual revenues grow to an estimated $15 million this year from $300,000 in 2004. ''Mexican business people and investors are confident that when this recession ends, Mexico will do well again,'' he said.
Mr. Gobelli and other Mexican executives generally agreed that the economy's overall outlook was positive. ''The businessmen say, 'This crisis did not start here in Mexico' as have so many crises in the past. It started in the U.S. and the world,'' Mr. Gobelli said. ''Therefore, they say, when the U.S. and the world recover, Mexico will too.''
Meanwhile, the slow American economy and moves to control illegal immigration with increased border patrols and raids on domestic job sites have reduced migration from Mexico. So remittances to families in Mexico from people working in the United States have declined sharply in the last year. But the Latino population in the United States has grown as a result of children born to immigrants in recent decades. That Latino population is 45 million, according to the Pew Hispanic Center.
This has led to more online commerce with Mexico and other shifts in the marketplace, said Hector Orci, co-founder of La Agencia de Orci, an advertising agency in Los Angeles. ''For example, Liverpool department stores in Mexico sell online to people here and the goods can be delivered to their mother living in Mexico,'' Mr. Orci said.
Spanish-language media is also shifting to more use of English language commercials and programs, he said. So Mr. Orci is building a new division of his agency, called One Plus Two, for the population that speaks English but enjoys Spanish language programming like telenovelas from Mexico.
''Online use is very high among Latinos, maybe 20 million people using broadband Internet,'' said Michele Ruiz, a former television anchorwoman who started the Saber Hacer (to know, to do) Web site in 2007. The site offers advice to Latinos on such subjects as parenting, personal finance, health and medicine and college preparation.
Ms. Ruiz said she had raised $700,000 to start the Web site and investors have now put in ''several million more.'' The site has close to 200,000 visitors, Ms. Ruiz said, and she is looking to private equity funds and other investors to raise an additional $5 million.
She wants to expand the Web site's reach and content, which includes presentations in English or Spanish on the importance of annual mammograms, on how to write resumes and apply for positions and how to talk to your doctor or your children about sex. ''We understand the culture and how people think,'' she said.

Tips and the IRS

2009-06-08T14:32:00.003-05:00

Of particular interest may be the italicized section, the second half of the article below:

from Restaurant Report

Accountant's Corner

Take Advantage of Tip Credit
By Ronald L. Noll, MS, CPA

If you employ tipped employees, you are entitled to a credit against income taxes. The credit is figured using FICA taxes paid on reported tips and wages that exceed the minimum wage requirement. For example, if you pay your wait staff $2.13 per hour, figure an additional $2.12 per hour of tips to bring the wage up to the standard minimum wage ($4.25). All additional tips are then eligible for the tip credit of 7.65%.
Beware, however, that the tip credit amount is added to profits, thus increasing your income tax liability. Credit the IRS and Congress for this bad idea.
The IRS is still conducting lots of tip audits. Be sure to complete Form 8027 correctly (due Feb. 28th). The form is designed to determine the percentage of tips on credit card sales compared to the tips on other sales. You are expected to report cash tips within 2% of the charged tips. More audits are generated because of improperly completed forms than all other causes. It has been reported that up to 75% of the restaurants covered by tip reporting rules don't file their 8027 Report. Be one of those who report!
Not all restauranteurs are required to file the 8027 report. You are required to file the 8027 with the IRS if you serve food and beverages for on-premises consumption; if tipping is customary in your establishment and you employ 10 or more full-time employees on a typical business day. A separate 8027 must be filed for each food or beverage establishment that meets these criteria.
A business is required to keep employee tip information for 4 years after the due date of the company tax return. Tipped employees are required to keep daily records of tips received. These records must include names and addresses, company name, tips received, tips shared with others and names of those individuals.
The Philadelphia District IRS is participating in a national tip study agreement. This is a program designed to pressure restaurant owners and at least 75% of their tipped employees to sign an agreement requiring 100% tip reporting. The local and national restaurant associations are violently opposed to this program because it holds restaurant owners for their employees' honesty. The National Restaurant Association is working very hard to change this. If the IRS does audit and finds tips under reported, the owner is liable for matching FICA accumulated during the past three years.
IRS Targets Restaurants The IRS is targeting cash businesses for audits. Restaurants are on the hit list. When the IRS audits a restaurant, the owners seem to be the ones under scrutiny. I have seen more audits investigating owners' personal bank accounts than business accounts. You are expected to explain the source of every deposit to your personal bank account, even though it is a business audit. The IRS is particularly keen on investigating currency deposits into your personal account.
The IRS is very strict concerning skimming cash. For example, if you deduct a vacation as a business expense, the IRS will simply recalculate your taxes, add a penalty and interest and usually forget it. On the other hand if you under-report sales, the IRS will consider criminal charges. Furthermore, if you have under reported more than $10,000 in each of the last three years, the IRS will try to send you to jail.
I know of a restaurant owner charged criminally for skimming and spent $45,000 in legal fees - about double the taxes he saved, not to mention the three years of worry and stress he endured. Obviously, there are better ways of making money than cheating the IRS.
If you are audited, get professional help A competent accountant, CPA or enrolled agent will make your audit much easier. Hiring an attorney usually makes the auditor suspicious. The auditor usually wants a face-to-face meeting with the taxpayer. Your accountant should help you prepare for questions likely to be asked. Never volunteer information. Answer all questions directly, but as brief as possible.

An amusing analogy

2009-06-02T16:40:00.003-05:00

Perceiving a lot of unresolved problems burdening our economy, I currently tend to take a negative view of most investment opportunities. While not dissuaded from my doubts, I found this article entertaining. Please don't take this post as a suggestion that you load up in the equity markets. Rather, please be reminded that maintaining sound perspective requires being open to hearing opinions contrary to your own.

When you think of it, stocks are a lot like tuna fish.

By: Frank Armstrong, CFP®, AIFA®

When you think of it, stocks are a lot like tuna fish. You buy them today to use sometime in the future. You don't expect to eat it in the store, or even when you get it home that day.

Let's pretend that you, your family, and your cat eat a fair amount of tuna fish. As you know, tuna fish comes in cans and has a long shelf life. We are used to buying it in large cans for $1.50. Now one day we go to the market and see that it is on sale for $1.00 a can.

What do we do?

Do we see ourselves as impoverished because we have some cans back home on the shelf?
Do we run home, grab all our unused tuna fish and then run back to the store to sell it back?
Do we feel bad because we have lost money on our cans at home?
Do we run home and throw them all out?
Do we vow never to buy tuna fish again?
Do we organize a protest march?
Do we start a campaign in the newspaper, on our Facebook page or on Twitter?
Of course not! We buy lots of tuna fish to take advantage of the low price. We know that we will need tuna fish for a long time and that the sale offers us a great opportunity to stock up for future needs. We have made the mental jump that LOW PRICE = GOOD.

Stocks have a long shelf life too and we buy them in order to use them a long time in the future. If you are a 401(k) participant, the stocks you buy now will be there when you need them in retirement. But the average investor seems to operate on the assumption that LOW PRICE = BAD! Rather than seeing temporary low price as an opportunity to buy something he will need in the future, he wants to dump what he has.

Especially if you have a few years to go before retirement, you should be dancing in the streets. This is your chance to scoop up bargains at very attractive prices. The world markets are on sale. Buy them while they're hot!

Note: I am indebted to Nick Murray, the Advisor's Advisor, a financial professional and nationally recognized public speaker for the inspiration for this piece which I have adopted from one of his articles published many years ago. Thanks Nick for your work throughout the years.

Frank Armstrong, CFP, is the founder and president of Investor Solutions, Inc., and the author of The Informed Investor (Amacom 2002). Contact him at Frank@InvestorSolutions.com

Investor Solutions, Inc. is a fee-only SEC Registered Investment Advisor based in Coconut Grove, FL with discretionary authority over assets in excess of $400 million. The firm provides investment management services for high net worth clients, pension plans, government agencies, trusts and foundations worldwide. Their web site is located at www.InvestorSolutions.com.

"Failing to plan is like planning to fail"

2009-05-23T13:44:00.003-05:00

Our next monthly mailer will encourage the use of business plans and provide a few basic how to tips. Here's the first few paragraphs of an article from Entrepeneur Magazine and here's a link if you'd like to see more of the article.

9 Ways to Use Your Business Plan

It's not just for financing--your business plan can help you spot future success or failure, attract suppliers and employees, and more.

By David H. Bangs Jr. | September 27, 2005

Article Contents
9 Ways to Use Your Business Plan
Managing With Your Plan
Do the Numbers Add Up?
Plan for the Possibility of Failure

Editor's note: This article was excerpted fromBusiness Plans Made Easy, a guide to creating a high-impact business plan.

The process of writing a business plan helps you take a thorough, careful and comprehensive look at the most important facets of your business, including the contexts in which it operates. Just raising questions can sometimes lead to a solution, or at least ensure that if conditions change you won't be forced to make decisions hastily. The ongoing "what if this or that happens?" inherent in the planning process keeps you alert. In other words, the planning process itself makes you a far more capable manager than you would be without it. For many, this is a more valuable result than securing funding.

In many ways, writing a business plan is an end in itself. The process will teach you a lot about your business that you are unlikely to learn by any other process. You'll spot future trouble areas, identify opportunities, and help your organization run smoothly, simply through the act of writing a plan.

Thanks to our techy, Janett, for the blog site

2009-05-23T11:28:00.003-05:00

which provides a user friendly site for us to post, and for readers to enter questions and remarks.